Home > News
  print button email button

Friday, Dec. 4, 2009

Farm households could get some relief

But DPJ's new subsidy program may have unproductive downside

Staff writer

Yoshinori Suzuki quit his job as an administrator at a cram school to take over his family's farm in Niigata Prefecture. Now the 39-year-old rice grower is just trying to survive.

News photo
Growth industry: Katsuichi Kobayashi stands in front of a paddy where he grows arrowhead potatoes in Iwatsuki Ward, Saitama. NATSUKO FUKUE PHOTO

"I never wanted to be a farmer," he said. "I've known since childhood that farming wasn't lucrative. I wanted to keep my administrative job."

Suzuki came back because after his father passed away he felt compelled to help his aging relatives. Returning to farming is rare in his neighborhood, he said, because other farmers' children are engaged in more profitable, nonagricultural work.

To support full-time farmers like Suzuki and revitalize the agricultural sector, the Agriculture, Forestry and Fisheries Ministry under the Democratic Party of Japan is planning to funnel ¥561.8 billion into an income compensation system for farming households.

Farmers would be paid the difference between higher production costs and market prices. The agriculture ministry hopes to get rice farmers nationwide into the program in April.

The ministry, however, is in a tug of war with the Finance Ministry, which wants the subsidies to go only to large-scale farmers or farmers in targeted regions.

The final shape of the program will remain unclear until the budget-making process for fiscal 2010 is finished later this month.

The subsidy program for individual farming households "will be too big as a model project," said Yutaka Harada, chief economist of Daiwa Institute of Research. He argues that while the new system will stabilize the finances of full-time farmers, it should be applied first to those who grow wheat or soybeans — two crops now mainly imported.

"It seems the DPJ is trying to show it is keeping the promise it made before the election to farmers," he said, adding the farm ministry needs to cut some projects that are quite simply a waste of money.

The economist said the ministry spent ¥50 million to open a farmers market in the Akasaka Sacas shopping complex in Minato Ward, Tokyo, but most of the money just went for rent.

"They should invest money in the compensation system, not a project like that," he said.

Nobuhiro Suzuki, an agriculture professor at the University of Tokyo (Todai), agrees that direct payments to full-time farmers would at least give them a minimum wage. "Their income is rapidly decreasing" because of declining food prices, he said.

The average annual income from farm products for full-time rice farmers was ¥3.37 million per household in 2007, according to the agriculture ministry, but "it is an income for a household with 2.6 people engaged in farm work," the Todai professor said.

Japanese farmers are sometimes criticized for being overly protected with subsidies, but he said in actuality they're not, compared with farmers in the European Union. "Ninety percent of their income is covered" because the EU budget is used to purchase the products when prices fall below the intervention price, he said.

In Japan, the prospect of an unstable income has been one of the main factors behind the dwindling numbers of full-time farmers.

According to an agriculture ministry survey in 2005, only about 22 percent of some 1.96 million farming households engage in agriculture full time. The number of households that own farmland but are not engaged in farming grew to 1.21 million in 2005 from 1.09 million in 2000.

Under such circumstances, many farmers turned their back on the Liberal Democratic Party and found something to support in the DPJ's promised compensation system. However, some full-time farmers aren't counting on it to solve all their problems.

"The compensation system might delay the decline of Japanese farming temporarily, but would not prevent it completely," said Kotaro Endo, a 57-year-old rice grower in Yamagata Prefecture.

"The only way to survive is to either expand farmland or grow value-added crops," he added.

Endo chose the latter, growing a type of rice found only in the prefecture and a specialty vegetable called "gyojana," selling them directly to some 500 customers across Japan. His rice fetches around ¥550 per kg, nearly double the price for rice sold in supermarkets.

Still, he isn't planning on expanding his business. Currently, he and his wife work full time at farming, and his parents and his son, who has a nonagricultural job, sometimes help out.

"To grow more, I would have to hire someone, but I wouldn't be able to pay adequate wages," he said.

Katsuichi Kobayashi, who farms 25 hectares of paddy in Saitama Prefecture, is in the same situation.

"My son is now a college senior, but can I pay him the money university graduates usually (command)? That would be difficult," he said.

The 52-year-old farmer is skeptical of the compensation plan, even though it might benefit him.

"Of course, I'd be happy to receive the subsidy, but I'm worried farmers might stop making efforts," he said. "Instead, I think (the government should) encourage Japanese to eat more rice so we don't have to reduce production."

Niigata farmer Suzuki hopes to expand his land in the near future to increase his profit margin, but he said he is "worried that small-scale farmers might not lease out their land after receiving the government subsidy."

As farmers in his area are getting older, they may let him use their land soon. While he considers this an advantage, he also wishes he had fellow farmers around his age. This isn't likely, however, because "people in their 40s have a family. They don't voluntarily take a low-income job."

Some farmers are earning a great deal of money by renting out or selling their land.

According to Kobayashi, who manages rented rice paddies in the city of Saitama owned by people who live elsewhere, some farmers in cities sell their valuable land and purchase cheaper land in the countryside.

"There are farmers who (lease) their land to build a warehouse or a restaurant. Their nonagricultural income is much larger," he said, adding some also sell their land to property developers. Those who become rich this way no longer work as full-time farmers, he said. "I'm upset we're equally called farmer."

Endo in Yamagata said farmers are looking to sell their land because farming is no longer attractive. "Ten years ago, there were people who tried to maintain their land size by buying another paddy somewhere else after selling one. But now farmers are holding out to sell their land for a public project or a shopping mall," he said.

According to a 2008 report by the Research Institute of Economy, Trade and Industry, the expectation of selling farmland for nonagricultural use is preventing improvements in productivity and consolidating land for large-scale farming.

Back to Top

About us |  Work for us |  Contact us |  Privacy policy |  Link policy |  Registration FAQ
Advertise in japantimes.co.jp.
This site has been optimized for modern browsers. Please make sure that Javascript is enabled in your browser's preferences.
The Japan Times Ltd. All rights reserved.